American Airlines’ rosy outlook lifts sector

American Airlines joined rival United Continental in issuing a rosier outlook for Q2 — in the clearest sign yet that the recent spate of high-profile controversies over the treatment of passengers has done little derail the sector’s recovery from last year’s price war. Shares across the airline sector were lifted sharply higher to fresh or near record highs on Wednesday after American said it expects total revenue per available seat mile to rise between 5 to 6% in Q2 compared to the year-ago period. The company had previously forecast an increase of 3.5 to 5.5%. American attributed the higher guidance to strong demand for domestic and Latin American travel as well as a stabilisation in fare prices. The airline also raised its outlook for Q2 pre-tax margin to between 13-14%, from earlier estimates of 12-14%. The stock jumped 3.7% to $53.53 — their highest level since March 2015. The news comes a day after rival United Continental said it expected Q2 consolidated passenger unit revenue to be up about 2% from a year ago — the midpoint of the company’s original guidance for between 1 to 3%. <br/>